The textile industry was facing huge liquidity crunch due to withholding of fuel price adjustments worth Rs40 billion by the Central Power Purchase Agency (CPPA) for the months of April and May 2015. Also the government of Pakistan has not notified the latest industrial tariff determined by NEPRA for 2014-15 so far, causing concerns amongst industrialists at large. The government has imposed equalization surcharge to subsidize the inefficiencies, corruption and line losses of the DISCOs. It should avoid imposition of illegal surcharges and release the withheld monthly fuel price adjustments immediately.

The most recent NEPRA public hearing for the slapping of over Rs2 per unit of various surcharges on the electricity tariff on the request of the government has also panicked the industry. This was being done after the Lahore High Court decision to hold the earlier changing of surcharges illegal led the industry to believe that some elements do not want the Pakistani industry to compete with the region and others.

“Such surcharges are irrelevant to the purchase and sales of electricity and therefore they could not be levied on the already burdened textile industry,” APTMA Chairman SM Tanveer said.  He added the textile industry of Pakistan was 100 percent compliant in bills payment with zero line losses on independent/grouped 11 KV feeders.  He lamented that the government was introducing uncalled for surcharges, especially when different provincial governments and the K-Electric are in default of more than Rs 250 billion to the CPPA and the government had arranged loans to counter this default.  “It was surprising that the fully compliant textile industry was forced to pay for the loan repayment etc.,” he added.